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Education Budget 2019: From tax-free education to an upskilling allowance, here’s what education experts want

  • By 2020, the average age of people will be 46 years in the US, 42 years in Europe, 48 years in Japan, but only 27 in India.
  • This means that India’s demographic dividend is a huge scope for us to capture the job market and can be a big boost for the country’s economy.

Roshni Chakrabarty   Here are the education budget expectations from education industry experts and professors for the interim Budget Session 2019.

By 2020, the average age of people will be 46 years in the US, 42 years in Europe, 48 years in Japan, but only 27 in India. This means that India’s demographic dividend is a huge scope for us to capture the job market and can be a big boost for the country’s economy. But this can only happen if today’s youth and students are provided with the correct skills to help them secure future jobs. For that, we need a good education budget.

Ahead of the general elections, the government will present an interim Budget tomorrow, February 1. The last Budget session 2019 of the present NDA government is likely to be presented by interim Finance Minister Piyush Goyal in the Lok Sabha, who was given additional charge of the Finance Ministry as Arun Jaitley has gone to the US for treatment.

The education budget of 2018 was one of the least valued at just 3.5 percent. Here is what education experts are expecting from the Budget session 2019:

1. All-over increase in Education Budget

India needs to increase its Education Budget in the Budget Session 2019.

Ravi Sreedharan, Founder and Director, Indian School of Development Management (ISDM):

“While it might sound ambitious, there is a need to double the current levels of spending in the two areas of public education and public health as a percentage of GDP. Spend on Education as a percentage of GDP is still around 3% versus the aspirational goal of 6%. Lots of developing and developed countries in the world have already been earmarking and spending close to this ballpark (as a percentage of GDP) on education.

Given the widespread inequality and poverty in India, education needs to play a critical role in bringing about intergenerational social and economic mobility with primary public education standing out as the most important area of focus.

Without a good quality government schooling system, it’s impossible to envision us moving towards a just, equitable, humane and sustainable society. Without that the potential demographic dividend we could benefit from is nothing but a pipe dream.”

Rohit Manglik, CEO, EduGorilla:

“The upcoming education budget needs to take initiatives such as allocating bigger spending on education, provision for proper teacher training along with higher pay and administrative incentives.

Incentives need to be provided to encourage research in all disciplines and for augmenting the technical capacity of the central educational institutions like NCERT, NUEPA, IGNOU and many more.

Furthermore, a comprehensive scheme on lines of Ayushman Bharat can be a great start to improve the quality of education.”

Prof. Indradeep Ghosh, Associate Professor & Dean (Faculty), Meghnad Desai Academy of Economics:

In an election year, it would be only appropriate to expect that the government will release an optimistic picture of its finances, which is to say that even though expenditures will be shown to increase on account of various programmes being announced ahead of elections, the revenue side will also appear buoyant and on the rise.

The truth of the matter may be more unpalatable, though. India’s fiscal situation is well known to follow a political cycle, and there is a real danger that FRBM mandates will not be respected in projections, and that the signal picked up by foreign investors will be a largely negative one, irrespective of what the budget actually says.

To allay such fears, the government should try to offer as realistic a vision as possible of the future course of policy if it is re-elected, and especially provide indications of how it proposes to solve critical problems of the Indian economy such as insufficient job creation and deficient infrastructure.

2. Tax-free education to boost ed-tech

Zishaan Hayath, CEO & Co-founder, Toppr:

“Two key steps need to be made – education needs more funding by the government, and it must be tax-free. The budget reserved for education reforms has been constantly declining over the last five years.

Currently, ed-tech is taxed at 18% GST which limits affordability to high-income groups. Education is not a luxury. In fact, online learning is the only way to cater to individual needs at a fraction of the cost. This should be made tax-free to lower after-school education costs for students.”

Shobhit Bhatnagar, Co-founder, Gradeup:

“In a country with over 200 million students, online education can play a major role in improving learning outcomes at a large scale. The government needs to actively support early stage industries like ed-tech that can create impact at scale.

Today, the GST rate for all educational services outside of schools and colleges is 18%, which is same rate bracket as discretionary items such as perfumes, chocolates etc. The government should move educational services to a no GST or the 5% slab.”

Vineet Chaturvedi, Co-founder, Edureka:

“Speaking specifically of the ed-tech industry, a reduction in GST would greatly help boost a culture of up-skilling among Indians and this is indeed the need of the hour for India to maintain an edge in technical skills.

Education and up-skilling is no luxury and it should not be taxed as such. It’s said that India lags behind even Sudan when it comes to its investments in education and healthcare mapped as a measurement of its commitment to economic growth, according to Institute for Health Metrics and Evaluation. It’s time to change that.”

Beas Dev Ralhan, CEO, and Founder, NextEducation India Pvt Ltd:

“With the General Budget around the corner, we have high hopes from the government and expect that a substantial amount would be set aside to the education sector so that we can lay a stronger foundation for new-age learning strategies.

The prerequisite for quality education becoming available to all is the free and easy access to quality e-learning resources. This can be initiated by the government through technologies such as artificial intelligence, virtual and augmented reality and cloud computing.

It is also important to ensure that internet access provided to rural areas is functional so that students from those parts can use it for effective self-learning.”

Amol Arora, Vice Chairman & Managing Director – Shemford Group of Futuristic Schools:

“For any country, the most significant returns are those garnered from investments made in its children.

The next generation is going to enter a globalized world and will be competing for jobs not just against other students but also innovative technologies that are quickly replacing human jobs.

In order to keep our children in the competition, we need to ramp up our ed-tech sector in the years to come. To that end, Budget 2019 should give certain tax breaks to ed-tech startups to enable them to reach sustainable levels.”

Sampreeth Reddy Samala, Founder and CEO, Worldview Education:

“For any education policy in India to make sense, it needs to address issues and provide solutions at a scale. From that view, potentially game-changing tax reforms in the education space are still pending. There is possibly great potential for vast private energy to be tapped into if tax reforms are brought into this space to make it attractive and competitive for private enterprises to enter, innovate and thrive.

Today, every and any educational idea which falls out of the traditional realm is taxed at par with some of the luxury products. This has to change to make investments into innovative ideas in education’ attractive which is crucial to meet the larger and current needs of an aspiring country like India.

This will also help the sector get rid of undesirable practices of working around these taxation hurdles in the name of the sector being and meant to be a novel, not for profit one. This is not only reducing the efficiency of the space but also killing innovation in education.”

Rohit Manglik, CEO, EduGorilla:

“While the Indian government has done much to safeguard the interests of all stakeholders of education, including students, the upcoming interim budget needs to address some important components of the education sector. Undoubtedly, lowering the GST rates from an existing 18% to expected 5% will make education affordable to students.”

3. Better skill development initiatives

Divya Jain, CEO, and Founder, Safeducate:

“In the previous Budget 2018, the government took key steps in skilling and also increased the funds. In this Budget session 2019, we expect that the government should take key steps in raising the quality of skills to levels demanded by a potential employer or even required for a person to start one’s own business.

The focus should be on integrating strategies to increase skilling outcomes and sustain economic growth. Current skill development initiatives should be integrated with nation-building mission programmes.

As an organization which provides skilling and get funded from the government to execute the Skilling programme, we seek some tax benefits. Constructing the skilling centre requires a lot of physical material which is being charged along with GST. We are not being able to reclaim the GST we had paid in the Inward supplies. Also, we have various certification and degree programmes in Logistics and Supply chain management where we are not being exempted from GST.

Support in terms of medical allowance for students that are being trained in skilling programmes is also required. As technology is changing, the Government needs to allocate more funds to improve the quality and develop excellence in Skilling centres.
The government has promised and initiated schemes in Skilling such as PMKVY 2.0, DDU-GKY, NAPS, Bharatmala and Sagarmala, PMKK etc. These schemes have helped us to reach the rural parts of India – ‘the real India’.”

Vineet Chaturvedi, Co-founder, Edureka:

“Skilling and continuous learning have become sufficiently important requirements in today’s competitive professional landscape so much so that even the Indian government has taken note of it and launched skill development initiatives.

What could accelerate India’s skill development story even further and provide fodder to corporate growth is a ‘skilling allowance’ for all tax-paying individuals. Such a rebate that rewards continuous learning will go a long way in creating an industry relevant workforce that can make India a skill hot spot.

Continuous learning is a necessity and not just an option anymore and by treating it on par with necessary allowances such as HRA, LTA, DA & others, GOI would be doing India a great service. After all, India’s biggest strength is its human resource.

Such an allowance will also be beneficial to IT, ITes industries which are subject to frequent skill churn and the ed-tech industry which has been working towards addressing this skilling need on ground.”

Nikhil Barshikar, Founder and MD at Imarticus Learning:

With technology disrupting jobs across sectors, it is important to bridge the skilling gap. The budget session 2019 should focus on skill development as it will directly impact the economy for the better.

We strongly feel the need for allocating more funds towards specialization i.e. in higher and further education, with the vision of enhancing the training and the research amenities for reskilling the workforce.

Tax rebates and incentive schemes will encourage educational institutions to expand their operations in Tier 2 & 3 cities.”

Dr. Jamshed Bharucha, Vice Chancellor, SRM University AP, Amaravati:

“The need to invest in the soft skills development within the education sector is highly important so that qualified, talented and gifted young Indians are not handicapped in any way by communication abilities that can impede their success on a national and international stage.”

Amol Arora, Vice Chairman & Managing Director – Shemford Group of Futuristic Schools:

“The government should grant financial incentives for organizations setting up educational institutes in rural and underserved areas. Currently, the private sector in education is viewed with distrust which is why concrete steps should be taken to show that public-private partnerships can be a win-win for all — delivering quality without fleecing the parents.”

4. Resolution of the angel tax for startups

Siraj Dhanani, Co-Founder and CEO, InnAccel Technologies:

“In the budget session 2019, the govt should continue the focus on healthcare and invest substantially in upgrading the primary and secondary health tiers in the country. This upgrade can leverage the indigenous medical technologies developed specifically for Indian healthcare needs, and thereby support the Make in India initiative.

I hope the budget provides a comprehensive resolution to the angel tax issue being faced by startups, especially ones based on generating intellectual property like medical technology startups.

Raising capital for startups working on affordable healthcare is already difficult- it is made more so by this angel tax, which is effectively a tax on Indian innovation.”

5. Relief for Small and Medium-sized Enterprises (SMEs)

Ankit Gupta, Vice President and COO,

“Despite making huge contributions to the economy, SMEs often face a multitude of challenges that restrict their growth. Due to numerous issues like lack of sustainability, insufficient funds, limited access to resources, heavy competition from large entities, small enterprises often fail to meet their true potential.

Although the ongoing digital revolution has allowed better connectivity while enabling MSMEs and SMEs to gain exposure to the global market, the struggle is constant. However, with the 2019 Union Budget approaching fast, the scenario may change.

Though the recent GST reform has given a huge relief to the SME sector, easy availability of loans, allocation of money in the digital lending sector and tax breaks would be our prime expectations for SMEs from this Budget 2019.”

6. Better student guidance and career counselling

Prateek Bhargava, Founder & CEO, Mindler:

“We at Mindler believe that allocation for funds to drive career counseling and guidance initiatives are a critical need at the ground level. There is a big need to drive students towards careers which are in sync with their abilities rather than blindly following a few career domain.

While national boards have made the need for guidance services mandatory, most schools have not implemented the same primarily due to lack of digital infra to implement state of the art platforms or lack of certified experts in this domain.

Identifying and mapping talent towards right domains is critical for our country, which has the largest youth population globally, if it wants to reap the demographic dividend. We hope the government will enlarge focus on PPP in providing high-quality career guidance to school students across India.

Lastly, in keeping with its recent declaration that it is open to reconsider GST rates on certain components in the education sector, we hope the government will review GST on ancillary services in education.”

7. More research funds

Dr. Jamshed Bharucha, Vice Chancellor, SRM University AP, Amaravati:

“Quality education needs to be made available to all. If we have to keep up with western nations and with regional neighbours in fields of science and technology, our educational institutions need to step up funding on research for a wide range of applications from health sciences, bio-medical, genomics, data science, machine learning, agriculture and food production, space and astrophysics.

University-led research can be an important bridge between ideas and practical applicability in the industry. We need to put in a greater focus on this and commit resources to centres of excellence that will tackle the areas where research is most needed and of national significance. This needs to be done with a sense of urgency on a national scale.

Because university research needs and national priorities(such as Defence Tech, Health & Sanitation, Nutrition & Food) are so closely aligned, Budget 2019 should also focus on University Research funding.”

8. More focus on teacher training and digital upgradation

Prateek Bhargava, Founder & CEO, Mindler:

“The government of the day’s efforts to drive growth, investment and embrace technology in education are all steps in the right direction, however, investment into technology upgradation and teachers training has been falling short.

While this is an interim budget, we hope that it will pave way for higher allocation in these two critical elements as they will usher in much-needed improvement in quality outcomes, allowing schools to leverage the power of digital solutions that bring high quality, personalization and focus on evaluation of outcomes.”

Zishaan Hayath, CEO & Co-founder, Toppr:

“The education budget should be used to digitise schools at a mass level so that every student can access quality education. It should also be used to upskill teachers and close the gap between the education system and current employer demands.

Beas Dev Ralhan, CEO, and Founder, NextEducation India Pvt Ltd:

“Training teachers on the latest pedagogies and Information and Communication Technology (ICT) is the need of the hour as they are expected to employ innovative teaching methods and make use of digital tools in the classrooms. However, there is a dearth of 11 lakh adequately qualified teachers in the K-12 segments.

Even though the government is trying to tackle the situation with initiatives such as Teacher Professional Development courses on the digital platform Diksha, this issue also needs prioritizing in the upcoming budget.

We also hope that the government provides the right kind of infrastructural support for a system of education that is on a par with global standards, and help Indian students face the challenges of tomorrow.”


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